Electric cars

Should I buy an electric car?

Everything you’ve ever wanted to know about the savings and subsidies on offer for electric cars and other vehicles

Electric cars are having a bit of a moment right now. With petrol prices rising and plenty of sizeable alternative subsidies in place, there’s never been a better time to take the greener route.

Meanwhile, as London unveils its Ultra-Low Emission Zone (more commonly known as the ‘ULEZ’), and the government gears up to ban the sale of new cars and vans running on petrol or diesel by 2040, electric vehicles will really start to come to prominence.

One thing is clear: electric cars absolutely do save you money in the long-run. In particular, there's an up-front saving of up to £3,500 in government grants and significant per-mile fuel savings in comparison with petrol and diesel, while we will soon also see electric tariffs which allow you to sell excess battery charge back to the National Grid.

But as the market evolves, your options get harder to understand – so here’s your guide to everything you need to know about electric cars in 2019.

What is an electric car?

There are electric versions of pretty much any type of road vehicle, up to and including massive freight lorries, currently in development, but they all share the same basic design principles.

According to Department for Transport data

Broadly speaking, there are three types of electric vehicle (EV), each of which comes with its own advantages and considerations:

Battery electric vehicle (BEV): These are fully electric, running entirely on rechargeable batteries, and are charged at home or at special charging points powered by the National Grid. The most common examples are the Renault Zoe and the Nissan Leaf.

Plug-in hybrid electric vehicle (PHEV): These vehicles have two motors – an electric one and a normal engine (usually petrol). They mostly run on electric power charged from the National Grid, deploying the petrol engine when more power and range is needed. This makes them good for moderate distances and for city driving when you want to reduce your emissions. The Toyota Prius is the classic example here.

Hybrid electric vehicle (HEV): The hybrid is quite similar to the PHEV, but it generates its own electricity using clever regenerative braking systems rather than plugging into charging points.

The latest generation of battery-only electric vehicles can travel almost 300 miles before needing to be recharged – far more than the average commute – while there are now enough charging points to get to almost anywhere in mainland Britain, provided you drive carefully.

That said, many cheaper electric cars have an effective range of under 100 miles, making them unsuitable for anything more than small, inner-city travel.

Electric cars are generally slightly more expensive than their petrol cousins, but as with a lot of green technology, there are significant savings over time.

How big is the electric car market?

There has been an explosion in electric vehicles in the last five years: just over 200,000 plug-in electric cars and vans have been registered in the UK up until February 2019 – up from just 3,500 in 2013. By the same date, there were also 19,375 registered public charging points at over 6,700 locations.

According to Go Ultra Low data

The Mitsubishi Outlander PHEV is the best-selling car in UK history, with around 37,000 sold, followed by the BEV Nissan Leaf at nearly 24,000 sold.

“In the context of the wider car market, it is encouraging to see electric car registrations performing so positively in 2018,” said Poppy Welch, the head of Go Ultra Low, a joint campaign between government and the car industry which promotes electric vehicles.

“We see 2019 as a pivotal year for the electric vehicle market; with even more models being released and charging infrastructure continuing to improve, we’re confident that this year we will continue to see the market go from strength to strength.”

Can you save money with electric cars?

The short answer is yes – but not on day one of ownership. Despite the relatively high up-front cost of electric cars, there are lots of ways in which they may end up costing you less than regular vehicles over their lifetime.

For starters, the government offers what it calls a ‘Plug-in Car Grant’ (PiCG) of £3,500 off the list price of any electric vehicle, in an effort to encourage more people to buy them. The EV grant won’t last forever, however, and as more people buy electric cars, the less subsidy will be on offer – so if you’re thinking of taking the plunge, do it sooner rather than later. Note that the grant is now a lot smaller for PHEVs.

If you use your car for work, meanwhile, you can claim up to 45p a mile for the first 10,000 miles (and 25p per mile after) through HMRC’s Approved Mileage Allowance Payments (AMAP) scheme. Whether your company pays the max 45p rate will depend on their policies.

You’ll soon be able to save money by charging your car overnight, too. Just before Christmas, the energy regulator Ofgem announced it was looking to incentivise drivers to charge electric vehicles outside peak times, “to allow more electric vehicles to be charged from the existing grid… This will help cut costs by reducing the need for expensive new power lines and stations and free up existing grid capacity.”

There are even plans to let households with smart meters sell excess car battery charge back to the National Grid when it’s operating at high load – generally during daytime. Ovo Energy, a leading supplier of green energy, is leading the charge with this vehicle-to-grid technology.

“We've learnt a lot about it over the past few months as we have started to install the chargers in our customers’ homes,” explained Hari Soni, the provider’s EV product manager. “The idea of our two-year trial is that we continue to learn and develop our understanding of not only the hardware, but the way in which customers interact with it.

“We're also really interested in seeing how much value customers will get from our trial proposition – which you can read more about here. We are all really excited about the future of vehicle to grid and want to use the trial to underpin any future, more widely available products and propositions.”

Maintenance costs for electric vehicles – particularly the battery-only variety – are meanwhile much cheaper. Electric cars have far fewer moving parts than petrol vehicles and need no oil. In fact, the main components that will need replacement are the tyres. Even things like gearboxes are much simpler, meaning far less expense from regular wear and tear.

Efficiency-wise, a full electric battery recharge costs significantly less than the equivalent tank of petrol.

What do electric cars cost to run?

Electric car battery capacity is measured in kilowatt hours (kWh), which measures how much energy it stores. Public charging stations cost an average of 35p per kWh, though charging from home during off-peak hours (overnight for instance, when the Grid is under less strain) might see rates of about 12p per kWh. The very largest electric cars, such as the Tesla X or S, can have batteries around 100 kWh in size, but most EVs have batteries which hold between 20 and 50 kWh

This means that fully charging a top-end Tesla might cost between £12 and £35, while a smaller 30 kWh electric car might cost between £3.60 and £10.50.

This compares well to a full tank of petrol – which costs anything between £60 and £100 depending on the size of your car, though admittedly petrol cars tend to have more range.

All in all, while there are undoubtedly higher up-front costs for electric cars, they absolutely will save regular users money in the long run – a benefit that will only grow as the technology develops.

Hire or buy?

You need to think carefully about how you buy your electric car: the market is young and the tech is improving very rapidly.

There are several finance options. A personal contract purchase (PCP) plan means you own the car, paying fixed monthly payments with the option to purchase after the agreement ends.

A personal contract hire agreement (PCH) sees you rent the vehicle, returning it at the end of the rental period with no further complications.

Given the immaturity of the market the contract hire option – walking away from the deal after it ends and swerving the risk of crashing residual values – looks the savvier option.

Should I buy an EV or a plug-in hybrid?

There’s frankly an overwhelming amount of information out there on electric cars, and it can be difficult to work out whether getting one is a good idea. This checklist should help

Get a battery-electric vehicle if you answer yes to most of the following:

Most of your journeys are under 70 miles a day

You have easy access to a second car for longer journeys

You can easily connect to a home power socket or local charge point

You care about the environment

A plug-in hybrid will be right for you if you answer yes to the following:

You commonly travel more than 100 miles in a day

You’d need some range margin for unexpected trips

You don’t have easy access to a charging point

You occasionally take long-distance journeys

Electric car insurance

At present, insurance for electric cars is more expensive than for conventional cars. Your insurance premium still depends on the usual risk factors, but electric cars themselves can go wrong in more expensive ways. The powertrain is the battery, for instance, which is usually a sealed unit which, if damaged, will cost serious money.

Electric vehicles are generally heavier than petrol or diesel models. “That means for a similar impact more damage is caused,” says Richard Billyeald of Thatcham Research, the Association of British Insurers’ technical partner. “That has a knock-on effect. Even though there may be fewer parts, more parts might be damaged because of more impact energy at work.”

The complexity of repair can be higher because insurers have less choice over repairers and diagnosticians. This may improve as battery tech gets more modular, meaning parts are easier to replace.

Should you worry about electric car battery life?

Most people who buy a new car in the UK lease it and keep it for up to four years. Realistically, an electric car battery will expire long after you’re in a new vehicle. Still, if you purchase your electric car outright, there are some decent warranties out there.

BMW guarantees its batteries for up to 100,000 miles and eight years. If capacity dips below 70% in that period, it will cover any work

Nissan offers a five-year warranty covering battery and electric motor, or up to 60,000 miles, for their Leaf